Tens of thousands of Florida snowbirds and homeowners will receive a home insurance quote this fall that they may have to accept or lose coverage. What these temporary residents are experiencing is unprecedented. The insurance crisis caused by climate change is far from over.
Insurance Commissioner Michael Yaworsky signed an order in early October giving six private insurers the green light to offer deals to Citizens customers. Remember that Citizens Property Insurance Corp. was created in 2002 by the state of Florida for homeowners who were unable to obtain insurance elsewhere. Citizens quickly became the state’s largest insurer.
This attempt to shift large numbers of policyholders from citizens to private insurers is known as depopulation. This means that from December 19th, 386,000 citizens’ insurance policies can be taken over by the private sector.
Tim Cerio, CEO of Citizens, said: “Depopulation is critical.” […] for the health of the market. “. The numerous bankruptcies in the private home insurance sector as well as lower premium costs led to more than 1.4 million customers concentrating on the last resort insurer Citizens.
Because of this meteoric growth and the risks associated with it, lawmakers passed a measure last December requiring Citizens customers to accept insurance offers from private insurers. If the private insurer’s premium does not exceed 20% of the costs for comparable protection, the policyholders are obliged to cover it.
The market was shaken last year when six insurers defaulted and others canceled all Florida policies and left the state.
In addition to the market, the lives of millions of policyholders were also turned upside down. One example, Andrea from Pinellas County revealed to The Guardian newspaper; “My insurance premium went from $750 to $4,678 from 1999 to 2023.” Faced with these high costs, she purchased insurance from Citizens and her premium dropped to $2,200. She plans to leave Florida when her bonus reaches $3,000, probably within two or three years.
Another statement sends shivers down the spine. After his retirement, Ian Brown moved to Vero Beach. Since he was previously insured with Citizens, the change in eligibility requirements required him to take out a private insurer. After Mr. Brown found another insurer, it increased its rates by 40% and eventually went bankrupt in the middle of hurricane season.
Phil Goddard, 64, a Pensacola-based translator, had one word for the governor:
“Instead of banning books and picking fights with Disney and drag queens, address the issues that really matter to Floridians.”